Ratio of CEO to Average Worker Pay Clarification from D J Nash

My posting on the ratio of CEO to average worker pay produced this great clarification/added data from our correspondent D J Nash. Thanks D J!

I, too, was asked for sources when posting this. Here’s what I responded with- I couldn’t track down the exact source of this chart but I found this page from the U of Cali. See figure 8 to see the comparison between U.S. CEO pay vs. ave. worker’s pay, all the way back to 1960, when CEO pay was 42.6 times higher than that of the average worker. Between 1960 and 1970 the figure more than doubled, but then reversed back down to about the same by 1980. Then an upward trend began, which has not since reversed itself. The disparity peeked at about 531 times that of the average worker in 2000. The 475 figure shown in the chart above comes from 1998. Since then the rate has had a couple of turns, once even dipping back to just below a 300 times difference, but you’ll notice that the upward curve has continued. When reading these line charts, as long as the line connecting the bounce back points remains unbroken, (the lower points in an upward trend), then the trend continues. The latest figure was a 344 times difference in 2007. For Europe at large it was a 25.1 times difference. That’s not shown in the chart, but mentioned in the text either right above or right below it. Lots of interesting stuff here on income disparity, such as the fact that although ceo pay has risen 298% JUST SINCE 1990, (and at times to much more than that but this is the latest numbers for that chart (chart 9) from 2005) worker pay has only increased 4.3%, and the minimum wage adjusted for inflation (as are all numbers on the chart) actually dropped by 9.3%. There’s much more great info on this page.
Here’s the link – http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

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About creativeconflictwisdom

I spent 32 years in a Fortune Five company working on conflict: organizational, labor relations and senior management. I have consulted in a dozen different business sectors and the US Military. I work with a local environmental non profit. I have written a book on the neuroscience of conflict, and its implications for conflict handling called Creative Conflict Wisdom (forthcoming).
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2 Responses to Ratio of CEO to Average Worker Pay Clarification from D J Nash

  1. Matt says:

    The source has been documented, and the numbers don’t stand up. Don’t get me wrong — I’m with the 99%, and the ratios are horrible. But this data isn’t accurate.

    http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/

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